Trimble Inc. reports 24.2% Net Income decline in 2020 and 3.6% Revenue decline
02/10/2021 • About Trimble Inc. (
$TRMB) • By InTwits
Trimble Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 20.8% in FY2020 vs. 19.0% in FY2019 vs. 15.6% in FY2016
- Trimble Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 3.5%
- CAPEX is quite volatile: $57m in FY2020, $69m in FY2019, $68m in FY2018, $44m in FY2017, $26m in FY2016
- In the last 5 years the company invested considerably less than D&A: $263m vs. $586m
- The company has business model with low profitability: ROIC is 8.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.2x while industry average is -0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 3.6%. Annual revenue decline showed slowdown in FY20Q4 - revenue increased slightly on 0.69%. During the last 5 years Revenue growth topped in FY2018 at 17.5% and was decelerating since that time. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.8 pp from 19.0% to 20.8% in FY2020. EBITDA Margin followed a growing trend at 1.4 pp per annum in FY2016-FY2020.
Gross Margin increased slightly on 1.2 pp from 54.6% to 55.8% in FY2020. Gross Margin stuck to a growing trend at 0.92 pp per annum in the last 5 years. SG&A as a % of Revenue decreased slightly on 1.2 pp from 25.6% to 24.4% in FY2020. SG&A as a % of Revenue declined at -0.58 pp per annum in the last 5 years.
Net Income margin decreased on 3.4 pp from 15.8% to 12.4% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.8% in FY2020. The company showed almost no change in CAPEX/Revenue from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 2.0%. During the last 5 years CAPEX as a % of Revenue topped in FY2018 at 2.2% and was declining since that time.
Return on investment
The company operates at low ROIC (8.5%) and ROE (11.6%). ROIC increased slightly on 0.57 pp from 7.9% to 8.5% in FY2020. ROE decreased on 6.1 pp from 17.8% to 11.6% in FY2020. ROIC stuck to a growing trend at 0.51 pp per annum in FY2016-FY2020.
Leverage (Debt)
Debt level is 2.2x Net Debt / EBITDA and 2.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 2.9x to 2.2x in FY2020. Debt dropped on 14.9% while cash jumped on 25.6%. During the last 5 years Net Debt/EBITDA topped in FY2018 at 3.4x and was declining since that time.
Trimble Inc. has short term refinancing risk: cash is only 82.1% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 29.9x and P/E 46.5x.
Management team
Trimble Inc.'s CEO is Robert G Painter "Rob". Robert G Painter "Rob" has 1 year tenure with the company. The company's CFO David G Barnes has spent 1 year with the company.
Financial and operational results
FY ended 12/30/2020
Trimble Inc. ($TRMB) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 2,362 | 2,647 | 3,108 | 3,264 | 3,148 | -3.6% |
| Gross Profit | 1,238 | 1,378 | 1,681 | 1,781 | 1,755 | -1.5% |
| SG&A | 634 | 702 | 830 | 835 | 768 | -8.0% |
| EBITDA | 369 | 419 | 536 | 621 | 655 | 5.5% |
| EBIT | 181 | 236 | 321 | | | |
| Tax | 45 | 130 | -5 | | | |
| Net Income | 132 | 118 | 283 | 514 | 390 | -24.2% |
| Stock Based Compensation | 53 | 65 | 77 | | | |
Balance Sheet
|
|---|
| Cash | 216 | 359 | 173 | 189 | 238 | 25.6% |
| Accounts Receivable | 355 | 428 | 513 | | | |
| Inventory | 219 | 265 | 298 | | | |
| Accounts Payable | 110 | 146 | 148 | | | |
| Short Term Debt | 130 | 128 | 256 | 248 | 290 | 16.8% |
| Long Term Debt | 490 | 786 | 1,712 | 1,738 | 1,401 | -19.4% |
Cash flow
|
|---|
| Capex | 26 | 44 | 68 | 69 | 57 | -17.7% |
| Acquisitions | 39 | 280 | 1,764 | | | |
Ratios
|
|---|
| Revenue growth | 3.1% | 12.0% | 17.5% | 5.0% | -3.6% | |
| EBITDA growth | 4.3% | 13.6% | 27.9% | 16.0% | 5.5% | |
|
|---|
| Gross Margin | 52.4% | 52.1% | 54.1% | 54.6% | 55.8% | 1.2% |
| EBITDA Margin | 15.6% | 15.8% | 17.2% | 19.0% | 20.8% | 1.8% |
| EBIT Margin | 7.7% | 8.9% | 10.3% | | |
| SG&A, % of revenue | 26.8% | 26.5% | 26.7% | 25.6% | 24.4% | -1.2% |
| SBC, % of revenue | 2.2% | 2.4% | 2.5% | | |
| Net Income Margin | 5.6% | 4.5% | 9.1% | 15.8% | 12.4% | -3.4% |
| CAPEX, % of revenue | 1.1% | 1.7% | 2.2% | 2.1% | 1.8% | -0.3% |
|
|---|
| ROIC | 6.1% | 7.5% | 7.9% | 7.9% | 8.5% | 0.6% |
| ROE | 5.9% | 5.0% | 11.1% | 17.8% | 11.6% | -6.1% |
| Net Debt/EBITDA | 1.1x | 1.3x | 3.4x | 2.9x | 2.2x | -0.7x |
People
|
|---|
| Insider ownership | 0.5% | 0.5% | 0.5% | | | |
| Employees | 8,388 | 11,287 | 11,287 | | | |
| Revenue/Employee, th. $ | 282 | 234 | 275 | | | |
Trimble Inc. ($TRMB) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 792 | 734 | 792 | 830 | | -1.2% | -14.2% | 1.0% | 0.7% |
| EBITDA | 149 | 147 | 152 | 170 | | -4.3% | -14.7% | 0.2% | 15.7% |
| Net Income | 62 | 63 | 85 | 180 | | -0.6% | -33.4% | 8.5% | -35.4% |
Balance Sheet
|
|---|
| Cash | 217 | 196 | 184 | 238 | | 0.0% | -1.6% | -0.3% | 25.6% |
| Short Term Debt | 281 | 268 | 280 | 290 | | 2.0% | 4.1% | 5.4% | 16.8% |
| Long Term Debt | 1,800 | 1,677 | 1,502 | 1,401 | | 3.3% | 3.3% | -7.4% | -19.4% |
Ratios
|
|---|
| Gross Margin | 55.7% | 55.3% | 55.5% | 56.5% | | 1.0% | 1.4% | 1.7% | 0.6% |
| EBITDA Margin | 18.7% | 20.1% | 19.2% | 20.5% | | -0.6% | -0.1% | -0.2% | 2.7% |
| Net Income Margin | 7.8% | 8.6% | 10.7% | 21.7% | | 0.0% | -2.5% | 0.7% | -12.2% |
Peers in Electronic Equipment & Instruments
Below you can find Trimble Inc. benchmarking vs. other companies in Electronic Equipment & Instruments industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | - | -6.3% | 23.2% | 72.9% | 40.1% |
| nLIGHT, Inc. ($LASR) | - | 36.8% | 38.1% | -7.7% | 26.1% |
| Luna Innovations Incorporated ($LUNA) | - | -21.0% | 29.7% | 64.3% | 17.3% |
| PAR Technology Corporation ($PAR) | - | 1.3% | -13.5% | -7.0% | 14.2% |
| Cognex Corporation ($CGNX) | - | 44.7% | 5.3% | -10.0% | 11.8% |
| |
|---|
| Median (26 companies) | -3.8% | 4.1% | 10.4% | 4.5% | -2.7% |
|---|
| Trimble Inc. ($TRMB) | - | 12.0% | 17.5% | 5.0% | -3.6% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | 80.0% | 85.5% | 91.3% | 87.0% | 86.7% |
| Cognex Corporation ($CGNX) | 75.2% | 75.6% | 74.4% | 73.8% | 74.5% |
| National Instruments Corporation ($NATI) | 74.5% | 74.5% | 75.4% | 75.1% | 71.2% |
| Coda Octopus Group, Inc. ($CODA) | - | 66.4% | - | 65.6% | 63.5% |
| Applied DNA Sciences Inc ($APDN) | 82.2% | 77.3% | 69.1% | 83.7% | 62.7% |
| |
|---|
| Median (26 companies) | 39.4% | 41.0% | 40.4% | 42.2% | 42.9% |
|---|
| Trimble Inc. ($TRMB) | 52.4% | 52.1% | 54.1% | 54.6% | 55.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Keysight Technologies Inc. ($KEYS) | 18.5% | 14.6% | -0.9% | 23.7% | 27.0% |
| Cognex Corporation ($CGNX) | 31.9% | 36.0% | 30.1% | 24.0% | 25.3% |
| National Instruments Corporation ($NATI) | 15.7% | 16.9% | 17.9% | 20.0% | 22.3% |
| FLIR Systems, Inc. ($FLIR) | 21.3% | 20.0% | 21.7% | 20.6% | 22.0% |
| Badger Meter, Inc. ($BMI) | 18.6% | 20.1% | 18.7% | 21.1% | 21.2% |
| |
|---|
| Median (26 companies) | 2.9% | 4.1% | 3.3% | 12.0% | 8.7% |
|---|
| Trimble Inc. ($TRMB) | 15.6% | 15.8% | 17.2% | 19.0% | 20.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Know Labs Inc ($KNWN) | 0.4% | 0.0% | 2.3% | 4.4% | 57.5% |
| Applied DNA Sciences Inc ($APDN) | 16.1% | 3.1% | 6.8% | 1.3% | 55.1% |
| nLIGHT, Inc. ($LASR) | 4.0% | 4.0% | 6.1% | 7.7% | 10.9% |
| Vishay Precision Group, Inc. ($VPG) | 4.6% | 2.7% | 4.8% | 3.9% | 8.5% |
| LightPath Technologies, Inc. ($LPTH) | 6.5% | 7.8% | 7.7% | 5.7% | 7.0% |
| |
|---|
| Median (25 companies) | 2.1% | 1.6% | 2.3% | 1.9% | 2.8% |
|---|
| Trimble Inc. ($TRMB) | 1.1% | 1.7% | 2.2% | 2.1% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zebra Technologies Corporation ($ZBRA) | 2.2% | 10.2% | 20.8% | 23.2% | 20.0% |
| Badger Meter, Inc. ($BMI) | 16.9% | 18.2% | 17.6% | 18.7% | 18.5% |
| Keysight Technologies Inc. ($KEYS) | 16.9% | 6.8% | -8.0% | 15.6% | 15.1% |
| National Instruments Corporation ($NATI) | 10.3% | 12.5% | 14.2% | 13.9% | 14.8% |
| Cognex Corporation ($CGNX) | 17.7% | 25.6% | 20.1% | 11.9% | 13.9% |
| |
|---|
| Median (26 companies) | 2.1% | 2.6% | 0.9% | 7.8% | 3.4% |
|---|
| Trimble Inc. ($TRMB) | 6.1% | 7.5% | 7.9% | 7.9% | 8.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Identiv, Inc. ($INVE) | - | - | 2.1x | 1.9x | 9.0x |
| Itron, Inc. ($ITRI) | 1.0x | 2.0x | 12.3x | 3.2x | 7.3x |
| Track Group Inc ($TRCK) | - | - | 12.2x | 5.2x | 3.5x |
| Luna Innovations Incorporated ($LUNA) | -6.9x | -108.1x | -19.9x | -2.9x | 1.8x |
| Zebra Technologies Corporation ($ZBRA) | 6.5x | 3.7x | 2.0x | 1.5x | 1.5x |
| |
|---|
| Median (16 companies) | -0.9x | -0.9x | -1.0x | 0.2x | 0.3x |
|---|
| Trimble Inc. ($TRMB) | 1.1x | 1.3x | 3.4x | 2.9x | 2.2x |
